In addition, absence of licenses and certificates from the Land and Development Ministry and MEF, and lack of serious cooperation prolong the review process.

“It usually takes a month or six weeks for banks to process applications. However, this is only possible if everything is provided,” says Hong.

He adds that while smaller banks have shorter loan processing timeframes, bigger banks such as CIMB and other regional banks take longer due to their approval thresholds.

For instance, CIMB Cambodia, a subsidiary of Kuala Lumpur-listed CIMB Group Holdings Bhd, is required to discuss with its parent company on large development loans.

Most banks are allowed to provide loans of up to 20 percent of its capital, he says, adding that financial institutions with regional footprint have bigger capital and exposure which allows them to fund big projects.

“But during the processing period, developers are often asked to furnish their financial model. Without crucial documents, we have a hard time assessing developers’ loan servicing methods,” Hong states.

Having said that, there have been no serious cases of non-performing loans but late payments are still prevalent among developers.

It takes two to tango

Hong firmly believes that parties should work together including effective solutions by the government such as increased campaigns on financial literacy.

High cash transactions, and reliance on collaterals suggest reduced knowledge and preparation for loan applications, hence their unfamiliarity of banking protocols.

“Although we see positive changes, Cambodia has a long way to go in terms of development loan applications,” he says.

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Such rapid development has only been made possible through a sustained campaign of foreign aid and – as Cambodia advances to become a middle income country in 2015 – that aid transformed into concessional loans dealt out by development partners.